blogging on issues relevant to a B-school business law course

The Laws Behind Your Data

Posted by Amy Chin.

Coming off the horizon of a myriad of data privacy scandals, legislators have called attention to the lack of federal regulation in the sector of consumer privacy. While some states, such as California, have taken charge and created statutes and regulations of their own, there exists no overarching federal statute. Many cases have fallen to the Federal Trade Commission (FTC) but even this federal agency lacks the substantial power needed to establish and enforce ethical data practices.

One of the most widely discussed scandals is Facebook’s sharing of personal user data first discovered in the case of the Cambridge Analytica scandal which questioned whether Facebook broke a consent decree to improve its privacy practices. The case made another public appearance recently in discussions with the FTC of a multi-billion dollar fine in response to this abuse of data. This would be the first significant fine issued joining the other approximately one hundred enforcement actions issued by the FTC in the past decade.

A common theme of this topic is the glacial pace of regulation and federal action in comparison to the everchanging speed of the technology it aims to regulate. With proponents pushing for legislation in Congress it still took two years for the Government Accountability Office (GAO) to author and publish the report on February 13th asking for the establishment of a “comprehensive federal privacy statute with specific standards.” The mixed bag of state statues, a limited FTC, and the judicially unexplored field of technology, the need for a universal policy is apparent.

Concerns over the misuse of data first arose from questions on the basis of ethics. Without official regulation the norms of business procedures are usually the only guiding factor in determining moral practices. Accordingly, since technology has advanced so quickly the industry has yet to pause long enough to set such universal standards. As a result, Zuckerberg and other companies avoided scrutiny for some time and have yet to be held accountable legally. These actions earned Zuckerberg the title of “digital gangster” from British lawmakers with the accusations that Facebook and similar tech giants were walking over the few rules and standards that had been set.

The nuance of data privacy in conjunction with consumer unawareness of where all their freely given data is being used leaves the field of data privacy exposed and with no direction. In the words of Rep. Frank Pallone Jr. (D-NJ.), who requested the GAO report, “consumers’ privacy is being violated online and offline in alarming and dangerous ways.” Lacking any concrete federal legislation or laws, the enforcement of data privacy standards has been anything but effective. While the GAO report is a step in the right direction, the fast pace of technology has lapped the subdued reaction of the government in creating effective laws to protect the information and data of its constituents.

Amy is a marketing and information technology management major at the Stillman School of Business, Seton Hall University, Class of 2022.